China Global

Wuhan, China Proposes A “House Ticket” System to Curb Speculation, and Cool Prices

A large Chinese city is mulling over a proposal to create a new type of anti-speculation system. Wuhan (never heard of it either) is currently taking feedback on a draft law to create a housing ticket system. If successful, all buyers would need approval from the Wuhan Housing Security and Management Bureau. The goal is to ration housing, and ensure speculators are identified and weeded out. Housing was declared a national priority, as the country focuses on productive growth. If this catches on, it could become more common in other large cities trying to cool home prices. At least in China.

Buying A Home In Wuhan? Ticket, Please

The draft proposal would see all prospective home buyers apply for a “room ticket,” required to buy a home. The ticket requires being vetted by the authority, and is only valid for 60 days after. After that, you need to apply again.

Home buyers who circumvent the system can land themselves in hot water. Families caught cheating will be banned from property purchasing for a year. They also land themselves on a “blacklist” of dishonest people. No ticket, no home. 

One last interesting point here is they’re also targeting the real estate industry. Professionals such as developers and agents, would no longer be able to act as a proxy. Circumvention of the rules can land professionals an investigation, fine, and spot on the industry black list. Not sure what the last part includes, but I’m guessing it isn’t great for business.

Track, Trace, and Stop… Housing Speculators

The idea isn’t to stop home purchasing, but to limit and track the speculators. New home prices in Wuhan have shown annual growth of 7.3% as of May, shows National Bureau of Statistics (NBS) data. It might seem tame to some Western markets, but they’re trying to get ahead of the issue. It also happens to be a part of the country’s platform to promote real economic growth. That includes making home prices sustainable and preventing an overallocation of residential investment.

The housing ticket system appears to be new, but the concept of limiting one home per person at a time isn’t. Shanghai and Guangzhou have previously limited buyers to one home at a time. Though this appears to be a much more aggressive targeting to curb speculation.

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13 Comments

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  • Ron 1 month ago

    They’ll come to Canada 🙂 No such laws here . Speculate as much as you can afford 😉

    • William R Konowal 1 month ago

      exactly, Justin will welcome them with open arms

  • Michael Demi 1 month ago

    Hmmm interesting idea. Doesn’t bode well with capitalism. I’d rather tax the sales of secondary properties to hell say 75% if you sell within the first 10 years of purchase. This would would rid the market of some of the speculators.

    • DC 1 month ago

      It’s actually more anti-capitalist to tax housing at such a rate. Having stable housing is good for the economy. Having someone keep a home empty for 10 years to avoid a state’s cash grab isn’t productive for anyone.

  • Bkl 1 month ago

    Compare to East Asia’s house price to income ratio Canada is still very affordable even in Toronto and Vancouver. This should tell you if the government wants it can prop up housing for a long time. Since vast majority of boomers are home owners you bet this will continue as long as votes from boomers matter.

    Better alternative is to just leave Toronto and Vancouver. Other cities in Canada are still affordable for now. I wouldn’t miss the chance on other cities if you missed Toronto and Vancouver. This might be your last chance before other cities are out of reach too.

    • DC 1 month ago

      haha. Real Canadian wage growth 3.6% over the past 5 years. Real Chinese wage growth 7.6% over the past year.

      You would have to be insane to think Canada is the growth opportunity when wages across East Asia are booming. Housing problems are a part of the great boom. Canada has no opportunity boom, just the hope that people in other countries don’t realize they’re going to leave Canada in the dust soon.

      I honestly wish my parents didn’t come to Canada, because the rest of my family that stayed back are doing much better. In terms of education, money, etc. It’s just more opportunity.

  • M.Bury 1 month ago

    Never heard of Wuhan? It’s the place where a little bug caused a minor disruption across the world about a year and a half ago.

    • Michael Fred Rogers 1 month ago

      You honestly didn’t get the sarcasm in that?

  • Canaduh 1 month ago

    Wuhan has more creative solutions than Canada to deal with real estate speculation. Wuhan. This is where we are as a society.

  • Ghl 1 month ago

    Wuhan and China’s government actually have the will and talent to control the pandemic. If anyone can suppress crazy housing prices it would be them. Canada will never be able to muster the political will to implement something like this.

    • idan 1 month ago

      You know who suppressed housing prices completely with super high efficiency?
      USSR.
      You know why?
      No market at all.

  • flipg 1 month ago

    With the initial covid scare Trudeau gave mortgage relief to people with up to 7 mortgages. That was the time to let the market rebalance. We all saw where the Liberals true allegiance lies: nonproductive capital.

    • Neek 1 month ago

      You are 100% correct, the government should have forced people with multiple residential properties to sell. If making housing affordable was their goal, apparently thats not the case.

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